Car insurance does not provide coverage for intentional damage, general maintenance, or damage caused by normal wear and tear. The minimum car insurance coverage also does not cover injuries or damage to the policyholder's vehicle, it only provides liability insurance to pay for injuries and property damage caused to third parties. Collision coverage covers damage to your car after an accident; liability insurance does not. Also known as PIP, personal injury protection, which is required in some states, covers you and people who travel in your car.
Liability insurance only covers the other driver and his passengers. This is basic personal accident coverage if third-party car insurance is not covered to pay medical payments. A basic auto insurance policy covers repairs that result from an accident but does not cover repairs due to wear and tear or mechanical breakdowns. The basic personal auto insurance required by most U.
S. states provide some financial protection if you or another driver using your car causes an accident that damages someone else's car or property, injures someone, or both. But to make the best decisions about buying other types of auto insurance coverage you may need, you'll want to know what's covered, what isn't covered, and what's optional. In addition to understanding the types of coverage, you'll also want to consider the amounts of coverage.
Why? Because state-mandated minimums may not cover the costs of a serious accident, it's worth considering purchasing higher levels of coverage. This is a summary of the types of coverage available, some are required; others are optional; all are individually priced (à la carte) so you can customize the amounts of coverage to fit your exact needs and budget. Even if these types of coverage are optional in your state, consider adding them to your policy for greater financial protection. Your auto policy will cover you and other family members on your policy, whether you drive your insured car or someone else's car with a permit. Your policy also provides coverage if someone who is not on your policy drives your car with your consent. Your personal car policy only covers personal driving, whether you're going to work, running errands or traveling.
However, your personal auto policy will not provide coverage if you use your car for business purposes, such as if you deliver pizzas or operate a home delivery service. Also keep in mind that personal auto insurance generally doesn't cover if you use your car to provide rides to other people through a ridesharing service such as Uber or Lyft. However, some auto insurers now offer supplemental insurance products (at an additional cost) that extend coverage for owners of vehicles that provide ridesharing services. Ride sharing is when you use your car for companies like Uber or Lyft. Someone pays you a fee in exchange for transportation.
The problem with ridesharing is that most policies don't protect you in the event that you're in an accident while carpooling. Most insurance policies don't include ridesharing as part of your protection, and the insurance you get through the rideshare company doesn't always apply. You need a specific rideshare policy to be fully insured while driving. Regular repair comes down to anything you would take your car to a repair shop for outside of repairs by accident. Your car insurance won't pay to repair your brakes, replace tires or tune up your engine. You won't pay for an oil change either. Any vehicle mentioned in the liability coverage statement is covered.
An accident in a vehicle not listed on the return is covered only if a designated insured (see above) was driving. While your car insurance may cover an accident or your car if it has been stolen, the same is not true for your personal items that may have been left inside your car, such as a laptop, sunglasses, phone, or other valuables. If your personal belongings are stolen from your vehicle or, even worse, your car is stolen with your things in it, your car insurance can pay for the replacement of your car but it will not pay for the replacement of your belongings. There are some insurance companies that only cover an accident if the person you were driving is included in your policy; others will only cover the accident if you were in the car. After most car accidents it's usually not necessary to find out if a driver is covered by an auto insurance policy. If a family member or friend drives your car and an accident happens, your car insurance policy may not fully cover it. Auto insurance only covers damage to other people's vehicles, people and property if the policyholder causes the accident. You should call your insurance provider and ask what would happen if there was an accident with another person driving your car. Coverage extends to any car that is not owned by the designated insured or another resident of the household that is used as a temporary replacement including rental cars for any insured vehicle that is out of use because it needs repair or maintenance or that has been destroyed. Even extended warranties and auto repair insurance don't cover basic maintenance or repairs meaning drivers must budget for those extra expenses to keep their cars properly maintained. A car insurance policy follows the car and not the driver as it is listed for a specific vehicle and you can only make a claim for that car. Mechanical breakdowns are not covered by car insurance but you can buy an additional policy called auto repair insurance or mechanical breakdown insurance. It may seem like there are many things that are not covered by auto insurance policies but understanding what they are can help drivers make informed decisions about their own policies.
